Last year, genomics pioneer Craig Venter said if oil companies didn’t want to invest in his biofuels technology, then no problem: He would happily develop a solution without them. Looks like that won’t be necessary — ExxonMobil (s XOM) has just announced that it will invest more than $600 million in a new photosynthetic algae biofuels program with Venter, including more than $300 million for his startup, Synthetic Genomics.

The investment announced this morning will support an estimated five to six years of research and development. Emil Jacobs, vice president of R&D for Exxon’s Research and Engineering Co., said in a call with reporters that it will likely take billions of dollars in additional investment to commercialize the technology for distribution in Exxon’s existing infrastructure. Within 5-10 years, Jacobs expects the project to be producing “large quantities” of transportation fuel.

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But while the partnership and technology are in early stages, today’s investment represents a major milestone for algae biofuels, bringing the world’s largest publicly traded oil company and one of the most influential scientists of our time (Venter’s best known for mapping the human genome) together in what Venter calls “the largest single investment in really trying to produce biofuels.”

At this point, Venter explained in the call, Synthetic Genomics, or SGI, has successfully engineered algae to secrete hydrocarbons similar to what Jacobs described as “intermediary strains in a refinery.” The idea behind the new collaborative R&D program, which will be based in a greenhouse facility in San Diego, is to collect and test thousands of strains of algae to find the most efficient and economical strains for production of transportation fuels. While Venter’s team will focus primarily on microengineering, Exxon will help with the macroengineering for production systems and integration needed for commercialization.

Whereas other companies working on algae biofuel technology have been looking at “coproducts” — things like chemical feedstocks and fertilizer that can be derived from byproducts of the fuel-making process — Venter said that he’s working to sustain “continuous production of pure hydrocarbons” from algae, rather than total biomass. As a result, he said, the process looks a lot more like “biomanufacturing” than farming, and it will require much less land than other fuels derived from plants (as little as a 10th of what’s needed to produce a comparable amount of fuel from corn, according to Venter).

Synthetic Genomics is already backed by high-profile venture capital firm Draper Fisher Jurvetson, along with other private investors, as well as strategic investor oil giant BP (s BP). It’s a long road to commercial scale production, however. As Venter put it this morning, Exxon and SGI have “lots of options and no final answers.”

We are involved in commercializing viable algae fuel production, on a large scale, but, doing so highly efficiently, and inexpensively. Removing the environment energy yoke would be great, however, until steeply discounted energy prices emerge, we will only have a partial solution. It appears doable.Sannerwind@gmail.com